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[zoe147]

UK data are once again the main focus in European session. The inflation data released this week are so far mixed, with PPI surging to record high while CPI tamed in the month in Jan. The BoE Quarterly Inflation Report is the main focus today and markets will look into the clues to confirm expectation of 2 more 25bps rate cut by the end of the year. Before that, Employment report is expected to show steady labor market conditions in UK, with claimant count at 2.5% in Jan while ILO unemployment unchanged at 5.3% in Dec. Sterling gave back some gain after RICS house price index released overnight dropped more than expected by -54.7% in Jan.

From US, the first important economic data of the week will be released. Headline retail sales is expected to be flat in Jan, after surprised drop of -0.4% in Dec. Ex auto sales is expected to bounce back by 0.2% mom in Jan, also up from prior month's -0.4%. Dollar is mildly firmer in early European session and today's price action could be critical in determining whether the retreat this week is a correction in the larger rebound in the Dollar.